TEMECULA, Calif., March 7, 2011 (GLOBE NEWSWIRE) -- Outdoor Channel Holdings, Inc. (Nasdaq:OUTD) today reported its operating results for the fourth quarter and full year ended December 31, 2010.
Consolidated revenues for the quarter were $25.8 million, a 5% decrease compared with $27.0 million in the fourth quarter of 2009. Advertising revenue for the quarter increased 18% percent to $11.2 million from $9.5 million in the fourth quarter of 2009 on the strength of a strong sales performance for our online site, solid increases in our time-buy revenue and an improving advertising marketplace. Subscriber fees for the quarter were $4.4 million, essentially unchanged from the prior-year period as increased subscribers and rates compared to year ago levels offset a further increase in our accruals for most-favored nation ("MFN") reserves, and production services revenue totaled $10.1 million for the quarter, a decrease of 22% compared to $13.1 million in the fourth quarter of 2009 due primarily to the impact of cancelled and non-renewed contracts at our Winnercomm operations over the past year.
Total operating expenses for the fourth quarter were $21.4 million, a 9% decrease compared to $23.5 million in operating expense for the fourth quarter of 2009, driven primarily by a $2.8 million decrease in production and operations expense – with most of that decline relating to reduced projects at our Winnercomm business.
Resulting operating income for the fourth quarter 2010 was $4.4 million, a 25% increase from the $3.5 million of operating profit generated in the fourth quarter of 2009. Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense, was $5.9 million, a 9% increase compared to $5.4 million for the fourth quarter of 2009.
On a segment basis, our legacy Outdoor Channel unit reported revenues of $15.7 million for the quarter, a 12% increase compared to $14.0 million of revenue for the fourth quarter of 2009 driven primarily by stronger online and time-buy advertising revenue. EBITDA, adjusted for share-based compensation expense, was $4.8 million, a 17% increase for the fourth quarter of 2009.
Our Production Services unit generated revenues (before intercompany eliminations) for the quarter of $10.5 million, a 21% decrease compared to $13.3 million for the fourth quarter of 2009 resulting from cancelled and non-renewed contracts at Winnercomm, net of increased revenue at our aerial cameras business. EBITDA (including intercompany eliminations), adjusted for share-based compensation expense, declined 14% to $1.1 million on the decline in revenue.
Consolidated net income for the quarter was $1.5 million, or $.06 per diluted share, compared to $565,000, or $.02 per diluted share, for the fourth quarter of 2009.
"We delivered solid advertising growth during the fourth quarter and for the full year as we capitalized on our category leadership across multiple media platforms," said Roger L. Werner, President and Chief Executive Officer. "Our short form sales finished up once again in the fourth quarter and our online advertising sales generated strong year-over-year growth. While revenues at our Production Services segment were down due to the elimination of low-margin business at Winnercomm, we improved the full-year profitability of the business and look to drive further efficiencies going forward. As we move into 2011, we are focused on expanding the distribution of our network and online products while seeking further operating efficiencies across our whole portfolio."
Full-Year Financial Results
On a full year basis, consolidated net revenues were $83.3 million, a 4% decrease compared to $86.9 million as a 3% revenue gain at the legacy Outdoor Channel was more than offset by reduced revenues at our Winnercomm unit within our Production Services segment.
Operating expenses for the year were $78.8 million compared to $84.9 million in operating expenses for 2009, a 7% decrease driven principally by the reduction in Winnercomm business.
Resulting operating income for 2010 was $4.6 million, a 140% increase from $1.9 million in operating income for 2009. EBITDA, adjusted for share-based compensation expense and acquisition and integration costs, was $11.2 million, a 5% increase compared to $10.7 million for 2009, with the improvement being equally split between our legacy and Production Services segments.
Our consolidated net income for the year finished at $1.2 million, or $.05 per diluted share, compared to a loss of $285,000, or $.01 per basic and diluted share, for 2009.
Investor Conference Call
Outdoor Channel Holdings' management will host an investor conference call on March 7, 2011, at 5 p.m. ET to review the company's financials and operations for its fourth quarter and full year ended December 31, 2010. Investment professionals are invited to participate in the live call by dialing 800-510-0219 (domestic) or 617-614-3451 (international) and using participant passcode 34810379. The call will be open to all other interested parties through a live, listen-only audio Internet broadcast in the Investor Relations section of the company's Web site, . For those who are not able to listen to the live broadcast, the call will be archived on the web site for one year. A telephonic playback of the conference call also will be available through Monday, March 14, 2011, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 39542299.
About Outdoor Channel Holdings, Inc.
Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel, America's leader in outdoor TV, and Winnercomm Inc., an Emmy Award winning production and interactive company. Outdoor Channel offers programming that captures the excitement of hunting, fishing, shooting, off-road motorsports, adventure and the Western lifestyle and can be viewed on multiple platforms including high definition, video-on-demand, as well as on a dynamic broadband website. Winnercomm Inc. is one of America's largest and highest quality producers of live sporting events and sports series for cable and broadcast television. Winnercomm also owns and operates the patented Skycam and CableCam aerial camera systems which provide dramatic overhead camera angles for major sports events, including college and NFL football. For more information please visit .
Nielsen Media Research Universe Estimates for Outdoor Channel
Nielsen Media Research is the leading provider of television audience measurement and advertising information services worldwide. Nielsen estimated that Outdoor Channel had approximately 34.5 million cable and satellite subscribers for March 2011. Please note that this estimate regarding Outdoor Channel's subscriber base is made by Nielsen Media Research and is theirs alone and does not represent opinions, forecasts or predictions of Outdoor Channel Holdings, Inc. or its management. Outdoor Channel Holdings, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information.
Use of Non-GAAP Financial Information
This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. The company believes that earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, provides greater comparability regarding its ongoing operating performance. This information is not intended to be considered in isolation or as a substitute for net income (loss) calculated in accordance with U.S. GAAP. A reconciliation of the company's U.S. GAAP information to EBITDA, adjusted for the effects of share-based compensation expense and acquisition and integration costs is provided in the attached table.
Safe Harbor Statement
Statements in this news release that are not historical are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including statements, without limitation, about our expectations, beliefs, intentions, strategies regarding the future long-term value of the company resulting from the company's current actions or strategic initiatives and the future anticipated value of Outdoor Channel to our audience, distributors and advertisers. The company's actual results could differ materially from those discussed in any forward-looking statements. The company intends that such forward-looking statements be subject to the safe-harbor provisions contained in those sections. Such statements involve significant risks and uncertainties and are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) service providers discontinuing or refraining from carrying Outdoor Channel; (2) a decline in the number of viewers from having Outdoor Channel placed in unpopular cable or satellite packages, or increases in subscription fees, established by the service providers; (3) a decline in viewership and revenues related to increased competition within the outdoor television segment; (4) a decrease in advertising revenue as a result of a deterioration in general economic conditions; (5) managing the company's growth and the integration of acquisitions; (6) decreased profitability if we are unable to generate sufficient revenues from our Production Services operations to offset its fixed costs; and other factors which are discussed in the company's filings with the Securities and Exchange Commission. For these forward-looking statements, the company claims the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
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